Orangio: Freemium models require 2% to 3% conversion to paid to be viable
Asia Orangio · Episode 695 | Ideal Customers, Moving from B2C to B2B, and More L... · Jan 9, 2024 · at 48:02
Marketing strategist Asia Orangio discusses unit economics for software startups evaluating freemium models.
0:00 / 0:11exact quote · 11.8s
▶ Watch the full episode on YouTube → 720p mp4 · rendered on demand · StarZero watermark
“In order for that to be viable, it's gotta be a two to three percent conversion rate into paid. And there are businesses who of course achieve this and actually beyond I've seen it, but I would say most, most folks are much below that.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Asia Orangio
Orangio: SaaS startups should drop credit card requirements after 50 customers
“Once you get to like, 10, 20, 50 paying customers, I think that you can take the credit card requirement off and create more of a pipeline for yourself.”
Orangio: Bootstrapped founders should offer free trials without upfront credit cards
“So when it comes to not requiring a credit card on the free trial, this is actually the model that I recommend the most to bootstrap founders because you do get more data in, but not so much data like you would in freemium, but not so little like you would wit…”
Orangio: Three-founder startups see 2x to 3x average month-over-month growth
“Once you get to founder trios, meaning there are three co-founders, this is when you start to see around two to three X average growth month over month.”
Orangio: Startups with four or more co-founders see dramatic growth drop-off
“Once you get to four or more, we start to see a dramatic drop off when it comes to average month over month growth.”
Orangio: Free trials requiring credit cards average 14% month-over-month growth
“And for free trial credit card required, it actually is the highest. So 14% month over month average growth for companies that do that. So requiring the credit card up front Does have a pretty big impact when it comes to initial, you know, upfront growth, and …”
Orangio: No-credit-card free trials achieve $6,500 LTV, doubling freemium performance
“So for context, free plans and freemium, we saw an average of three K LTV. When we looked at credit card required on the free trial, it was about 3.6 K LTV. Free trial credit card not required. 6.5 K. So easily two X over freemium or free plans.”